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| Bulldozer pushing coal |
Coal has been in the news lately. China is looking at a shortage for their electrical power generating plants this winter. Zerohedge has a story about the current coal market in the USA. All this reminds me of a story from some years ago about an accident involving a bulldozer feeding coal to a power plant. I don't recall the particulars of the accident, but the situation was very telling.
There is a large pit, maybe a hundred yards across, full of coal. In the bottom of the pit is a hole that leads to conveyor. The conveyor carries the coal to the furnace where it is burned to generate heat to make steam to drive the turbines. There is also a bulldozer in this pit. The operator's job is to keep the conveyor fed, so all day long he is pushing coal into the center of the pit where it falls onto the conveyor. Somebody is doing this 24 hours day, seven days a week, 52 weeks a year. That's a bunch of coal, and that's only one power plant.
We've been hearing about how bad coal is for years, but now that we are looking at the price of natural gas, all of sudden coal is looking much better.
3 comments:
"...but now that we are looking at the price of natural gas, all of sudden coal is looking much better."
Cheaper up front, not necessarily better. Coal is harder to deliver, behaves like coarse grinding compound so tough on the power plant machinery, and the dirty smoke clogs up flus and stacks. The high maintenance is required even burning anthracite, softer coals are exponentially worse.
The biggest miner, Peabody, say 90% of the 2022 output from its biggest mine is sold.
#2 Arch has sold 100% on it's 2022 production at 30% more than the current price.
.Alliance shipping 32 million tons in 2021, has sold 30 million in '22 and 16 million in '23.
High maintenance has a high cost, but evidently it is not high enough to make a difference to the bean counters.
The power plant needs fuel to make money. If gas goes too high and there is an alternative that's cheaper, they'll go for it. The higher handling and maintenance costs are all baked into the numbers they use to decide. Numbers that come from a hundred years of history.
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